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Financial Glossary
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 Stockbroker
An Exchange member firm which provides advice and dealing services to the public and which can deal on its own account.
A broker dealing in stocks and shares on behalf of a client.As an investor, you will need to use a broker for most share dealing, and you should choose one that is a member of the London Stock Exchange and regulated by the Financial Services Authority (FSA). There are three types of service on offer:1. DiscretionaryThe broker has general discretion as to how he manages your portfolio.You can narrow the discretion by giving the broker guidelines. For instance, you can ask him to pick shares that provide high income rather than capital growth, or to investing only in "ethical" companies.For his services you pay a commission on dealing (usually around 1.65%) and possibly a quarterly or annual management charge based on the value of your portfolio. If you are paying a management charge, your dealing commission should be lower (around 1%).Beware of the discretionary broker who churns your portfolio. Churning means frequent dealing which creates commissions for the broker but may not be in your interests.2. AdvisoryThe broker will contact you to suggest changes in the composition of your portfolio, but he does not have the authority to trade on a completely discretionary basis.Charging structures will vary from broker to broker. Some charge more for an advisory service than for a discretionary service, because there is more work in having to contact you before every deal.Under FSA rules you will have to fill out a form describing your financial situation and your objectives, so that the broker can provide a suitable service.3. Execution onlyThe broker"s primary function is to execute the buy/sell instructions which you give him. He does not give advice either proactively or at your request.Varying degrees of administrative help will be provided - e.g. summaries of your year"s trading for your tax return; e.g. factual education.Execution-only brokers make their money from dealing commissions, and the market is very competitive. Typically, the percentage charged on a purchase or sale depends on the value of the transaction, with the percentage dropping as the value rises. There will usually be a minimum charge.Note that you don"t actually need a broker in all circumstances:When a company has a new issue, you can subscribe for shares directly on the basis of its printed or online prospectus.You can invest in unit trusts by filling in one of their advertisements in the newspapers, or getting in touch on the internet.You can even deal through a bank, accountant or solicitor.But if you want to deal at all frequently it makes sense to use a broker.
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Glossary 
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Stockbroker \ An Exchange member firm which provides advice and dealing services to the public and which can deal on its own account.
A broker dealing in stocks and shares on behalf of a client.As an investor, you will need to use a broker for most share dealing, and you should choose one that is a member of the London Stock Exchange and regulated by the Financial Services Authority (FSA). There are three types of service on offer:1. DiscretionaryThe broker has general discretion as to how he manages your portfolio.You can narrow the discretion by giving the broker guidelines. For instance, you can ask him to pick shares that provide high income rather than capital growth, or to investing only in "ethical" companies.For his services you pay a commission on dealing (usually around 1.65%) and possibly a quarterly or annual management charge based on the value of your portfolio. If you are paying a management charge, your dealing commission should be lower (around 1%).Beware of the discretionary broker who churns your portfolio. Churning means frequent dealing which creates commissions for the broker but may not be in your interests.2. AdvisoryThe broker will contact you to suggest changes in the composition of your portfolio, but he does not have the authority to trade on a completely discretionary basis.Charging structures will vary from broker to broker. Some charge more for an advisory service than for a discretionary service, because there is more work in having to contact you before every deal.Under FSA rules you will have to fill out a form describing your financial situation and your objectives, so that the broker can provide a suitable service.3. Execution onlyThe broker"s primary function is to execute the buy/sell instructions which you give him. He does not give advice either proactively or at your request.Varying degrees of administrative help will be provided - e.g. summaries of your year"s trading for your tax return; e.g. factual education.Execution-only brokers make their money from dealing commissions, and the market is very competitive. Typically, the percentage charged on a purchase or sale depends on the value of the transaction, with the percentage dropping as the value rises. There will usually be a minimum charge.Note that you don"t actually need a broker in all circumstances:When a company has a new issue, you can subscribe for shares directly on the basis of its printed or online prospectus.You can invest in unit trusts by filling in one of their advertisements in the newspapers, or getting in touch on the internet.You can even deal through a bank, accountant or solicitor.But if you want to deal at all frequently it makes sense to use a broker.
Stockbroker / an exchange member firm which provides advice and dealing services to the public and which can deal on its own account.
a broker dealing in stocks and shares on behalf of a client.as an investor, you will need to use a broker for most share dealing, and you should choose one that is a member of the london stock exchange and regulated by the financial services authority (fsa). there are three types of service on offer:1. discretionarythe broker has general discretion as to how he manages your portfolio.you can narrow the discretion by giving the broker guidelines. for instance, you can ask him to pick shares that provide high income rather than capital growth, or to investing only in "ethical" companies.for his services you pay a commission on dealing (usually around 1.65%) and possibly a quarterly or annual management charge based on the value of your portfolio. if you are paying a management charge, your dealing commission should be lower (around 1%).beware of the discretionary broker who churns your portfolio. churning means frequent dealing which creates commissions for the broker but may not be in your interests.2. advisorythe broker will contact you to suggest changes in the composition of your portfolio, but he does not have the authority to trade on a completely discretionary basis.charging structures will vary from broker to broker. some charge more for an advisory service than for a discretionary service, because there is more work in having to contact you before every deal.under fsa rules you will have to fill out a form describing your financial situation and your objectives, so that the broker can provide a suitable service.3. execution onlythe broker"s primary function is to execute the buy/sell instructions which you give him. he does not give advice either proactively or at your request.varying degrees of administrative help will be provided - e.g. summaries of your year"s trading for your tax return; e.g. factual education.execution-only brokers make their money from dealing commissions, and the market is very competitive. typically, the percentage charged on a purchase or sale depends on the value of the transaction, with the percentage dropping as the value rises. there will usually be a minimum charge.note that you don"t actually need a broker in all circumstances:when a company has a new issue, you can subscribe for shares directly on the basis of its printed or online prospectus.you can invest in unit trusts by filling in one of their advertisements in the newspapers, or getting in touch on the internet.you can even deal through a bank, accountant or solicitor.but if you want to deal at all frequently it makes sense to use a broker.
